Knowing what success looks like when it comes to your marketing will elevate you as a CEO to make informed decisions based on data.
Your marketing team will no longer be stretched, hitting deadlines for campaigns that don’t drive revenue. Take some of the pressure off you and your team by focusing on what drives success and efficiency to your business so you can be productive rather than just busy.
What is marketing success?
Marketing success means several things to different people. However, in my opinion, your marketing success should lead to one thing – higher profit margins.
Your marketing channels are just a vehicle to get you to your business goal, which 9 out of 10 times will be revenue based.
Often I see CEOs focus on vanity based metrics that look good on paper but don’t tell the whole story. Ranking on page 1 of Google and seeing an increase in website traffic means nothing if you aren’t converting that traffic into sales.
I know from my experience as an SEO Strategist for an FTSE 250 company that CEOs are not interested in vanity metrics and focus more on impacting revenue.
Differences between marketing KPIs and business outcomes
This explains why so many CEOs fail to understand the difference between KPIs and business outcomes.
Marketing KPIs are indicators of how well your marketing is performing. These type of KPIs can be great to measure employee performance and understand whether a campaign is performing well.
These KPIs also form part of a measurement plan to see how it impacts your business objective.
For example, having the right measurement plan can help you make smarter decisions regarding your paid spend and prevent you from pouring more money into a campaign that isn’t converting.
Without a measurement plan in place, you may just focus on the campaign performance rather than the impact on your business objectives.
Imagine selling an SLO product via a Facebook ads campaign. There are two ways to measure the effectiveness of your campaign:
As you can see, the marketing KPI assists the more significant business outcome, so rather than just focusing on whether you got a cheap CPC for your ads, you should also focus on what that did for your revenue.
Keeping the final business outcome in mind will prevent you from solely making decisions based on whether the campaign is performing from a marketing perspective.
Vanity vs valid metrics
Marketing success metrics fall into two categories: vanity metrics and valid metrics. There is no reason you should not measure vanity metrics in certain situations, but they shouldn’t be the only metrics you measure.
Vanity metrics tend to be vague and don’t always tell you the whole story. They can, however, be used to measure employee performance or even help you troubleshoot a campaign that isn’t performing well.
Vanity metrics include but are not limited to:
These metrics are a great ego booster which is why we often track them. Someone with 2,000 followers on Instagram could be converting higher and making more sales than someone who has 10,000 followers and converts poorly.
Valid metrics tend to focus on what drives revenue to your business and impacts your bottom line. Some metrics include but are not limited to:
Essential marketing success metrics you should measure
Planning your marketing metrics are the first steps in creating a marketing measurement plan. If you are just starting, then these are some of the essential metrics that I recommend measuring:
Establishing which channels generate the most revenue is the smartest way of creating a marketing plan. There is no point in spreading your marketing team thin across multiple channels if only two of them are converting.
Cost per lead
The next step is to identify the cost per lead according to the channel to see which is most cost-effective. You may also want to check the average order value per channel to see whether specific channels have a higher purchase value.
Having this level of detail can help you make simple decisions based on data rather than guessing.
For example, let’s imagine you are looking to promote your new program and use Facebook and Pinterest ads. There are a couple of scenarios that could happen:
No measurement plan: you continue to spend across both platforms and based your decisions on the CPC and number of leads
Measurement plan in place: you review your campaign data and realise that although Pinterest is converting better, your Facebook ads have a higher purchase value as customers are adding the upsell to their basket
Based on this level of data, you may decide to pivot your budget according to what you need at that precise moment.
Landing page conversion
Rather than focusing on just website traffic, you should focus on whether you are converting traffic into customers.
This is where A/B testing can come in and help you learn more about your customers and figure out what resonates with them. Simple questions you could ask yourself are:
In my experience, A/B testing works great when you can combine organic and paid traffic sources together. I’ve had great success in A/B testing a high volume page that increased traffic by 86% and revenue by £250,000 in the space of 6-weeks.
More marketing teams should be taking a ‘test and learn’ approach to campaigns rather than recreating the wheel every time.
Customer lifetime value (CLV)
Having this metric to hand can help you understand how much revenue you can expect from one customer for their lifetime. You can then use this to plan how often you are going to launch.
Let’s say you have three main revenue drivers:
Here is a very simplified example of what this could look like for 12 months:
Having this data to hand can help you understand where you need to focus in which quarter. This could change the way you create your marketing and launch plans, and you could decide to open applications for your mastermind once for a cash injection, launch your membership twice a year and then keep your SLO going in the background now and then.
Customer churn rate
The example above is a straightforward calculation, and to get a more accurate reading, you also need to consider your customer churn rate.
This is the calculation between the number of customers lost per year divided by the number of total customers that year. Once you have this, you should multiple by 100 to get a percentage.
Let’s use the membership as an example here as they tend to have a higher churn rate:
Again, this level of detail layered with your CLV metrics are so much more valuable than whether you have 10,000 followers on Instagram.
How to get starting with measuring your marketing effectiveness
The first step in measuring your marketing effectiveness is creating a marketing measurement plan.
Once you have that in place, you can break down each business objective into goals and KPIs that you need to measure.
If you loved reading this blog post and want more details, get in touch for a coffee chat, and we can go how I can support you.
My VIP day – Measure, Automate, Scale will take all the data you are currently tracking and create a simple measurement plan that you can use in your business.
Pri Kruijen is an award-winning SEO and the founder of Brilliantly Visible. She has spent the last 5-years working as part of the best SEO teams globally, including multiple-award-winning team MoneySuperMarket and the UK’s best small agency Re:signal.
She recently left the corporate world behind to help digital entrepreneurs make data-driven decisions through simple + automated metric dashboards so they can scale their business and grow their team.
When Pri isn’t supporting six and seven-figure CEOs, she is cooking up a storm in her kitchen, watching Spanish movies on Network or travelling across Europe.
This content was originally published here.